Proceedings Volume Cover
6300 North Central Expressway  
Dallas 6, Tex.  
PAPER 1 4 4 4 - G  
Gilbert H. La Piere, Associate Member AIME  
W. E. Hutton  
& Co., New York City, N. Y.  
Publication Rights Reserved  
This paper is to be presented at the AIME Annual Meeting of the Society of Petroleum Engineers of  
the American Institute of Mining, Metallurgical and Petroleum Engineers in New York City, Feb. 14-18,  
1960, and is considered the property of the Society of Petroleum Engineers. Permission to publish is  
hereby restricted to an abstract of not more than 300 words, with no illustrations, unless the paper  
is specifically released to the press by the Editor of the Journal of Petroleum Technology or the  
Executive Secretary of SPE. Such abstract should contain appropriate, conspicuous acknowledgment of  
where and by whom the paper is presented. Publication elsewhere after publication in Journal of  
Petroleum Technology is granted on request, providing proper credit is given that publication and the  
original presentation of the paper.  
Discussion of this paper is invited. Three copies of any discussion should be sent to the  
Society of Petroleum Engineers office. Such discussions may be presented at the above meeting and  
considered for publication in Journal of Petroleum Technology with the paper.  
consensus of various petroleum economists  
indicates that oil and natural gas will supply  
75 per cent of the energy used in the United  
States by the year 1967 and that the growth in  
Since May 1, 1957, oil shares have lost their  
rank of leadership with investors. Until  
recently, the public had invested more money in  
demand in the U. S. will approximate  
4 to 5 per  
cent/year over the next decade. It is estimated  
that demand will approach 14 million B/D by  
1967 compared with approximately 9.5 million  
B/D today; it is further estimated that the Free  
World oil consumption will increase at an average  
oil than in any other industry  
- but today, oil  
shares have slipped to third place behind utility  
and chemical stocks. The current value of oil  
common stocks approaches $43 billion, approxi•  
mately the same value they had over  
years ago  
in May, 1957. In contrast, utility stocks moved  
from $33 to $50 billion, and chemical stocks  
moved from $30 to $46 billion over the same  
rate of approximately 7 to 8 per cent/year, near•  
ing 30 million B/D in 1967 compared with approxi•  
mately 17 million B/D today.  
period. Over the past  
years, oils were one  
of the major groups showing a decline in their  
market price, dropping from 20 per cent of the  
total value of all common stocks on the New York  
Stock Exchange to today's figure of approximately  
15 per cent of total value.  
According to the Chase Manhattan Bank,  
capital outlay to meet the expansion needs of  
the Free World petroleum requirements over the  
next decade will reach $140 billion. This is  
almost double the $72 billion spent for property,  
plants and equipment during the past 10 years.  
The majority of future outlays will be spent in  
foreign countries because the rise in cost for  
finding oil in the U. S. is sending the major oil  
companies abroad in search for new oil. Foreign  
expenditures will rise 140 per cent over that of  
the past 10 years while domestic expenditures  
will rise 70 per cent.  
An investor should not be too alarmed at  
these statistics because the oil industry has  
a period of tremendous expansion  
during its first 100 years, an expansion ac•  
celerated particularly by the invention of the  
automobile in the early part of the century.  
Much of the gain in petroleum demand can be  
credited to displacement of other fuels. The  
exact extent of this displacement is not known,  
but in 1920 oil and gas accounted for slightly  
less than 18 per cent of the total energies used  
in this country. By 1943 this rate had climbed  
to 40 per cent, and in 1956 it had reached 67  
per cent. Today, oil and natural gas supply 72  
per cent of the energy used in the United States.  
Over the past twelve years, capital expendi•  
tures to find and develop oil in the U. S. have  
consumed 75 per cent of the Free World's total  
oil development cost, but this source has yielded  
only 15 per cent of the new oil. Four times as